For instance, based on the pure management fee model described above, a fund with a management fee and fixed expenses of $600,000 would break even at $40 mil- lion in AUM. By decreasing fixed expenses by $60,000, or 10%, the fund’s breakeven AUM drops by $4 million to $36 million. Stated differently, $15,000 in fixed expenses equates to $1 million in AUM. In some cases, reducing fixed expenses may mean cutting excess and non-core spending across the board – including measures such as reducing headcount, taking smaller space and cutting budgets by a prescribed percentage in each area. Sometimes such.
